The quickest, easiest way to cut medical claims expenses is to insure fewer people or to eliminate benefits. This is often not the way to maximize social utility, and sometimes these types of cuts actually increase societal costs.

There have been dramatic cuts in the mental health safety net in light of the recession and the dramatic decrease in state revenue.Most mental health care is underwritten by private insurance and states; there is little mental health care delivered by the federal government outside of the Veteran’s Administration. There’s been more focus on this problem in light of the tragic shooting of Representative Gabrielle Giffords and 18 others in Tucson by a mentally ill 22 year old man.

Mental health care costs have not climbed in parallel to the costs of the rest of the health care system – mental health is often “carved out” from traditional insurance, and the mental health management companies have been very effective at shortening hospital stays and reducing the overall cost of care.States have closed their inpatient mental health facilities across the country – deinstitutionalizing all but the most dreadfully incapacitated with mental illness.

Care in the community has unfortunately not kept pace with needs. It’s virtually impossible to find an available child psychiatrist, for instance, and emergency departments dread the arrival of someone who needs a psychiatric hospitalization.Such patients will spend many hours awaiting the frantic work of psychiatrists and social workers to find an available bed.

But it gets worse. The LA Times reports that states have cut $2 billion from mental health programs since 2009, and closed 4000 inpatient mental health beds.The state of Arizona cut 50% from its Department of Health, and reduced services for 14,000 with mental illness.

The New York Times points out that the cuts are across the country, and they are being proposed by politicians across the political spectrum.

·Mississippi: Funding 13% less than that required for level services, and closure of 200 beds

In some instances, mental health cuts lead to increased costs elsewhere in the system.The Arizona shootings might be an extreme example (and it’s possible that a more vibrant mental health system would not have prevented this tragedy).Those emergency department and medicine hospital beds occupied by people awaiting a mental health bed aren’t available for other patients, and most of us clinically have seen people with unmet mental health needs requiring additional medical care. It’s expensive to institutionalize the mentally ill; it’s often even more expensive to incarcerate them.

The real tragedy of underfunding mental health systems has nothing to do with whether or not costs are saved – it’s the impact on those with mental illnesses and their families.Caring for a mentally ill loved one is overwhelming for many loving families, and these cuts make caring for a mentally ill child or relative all the more difficult.